Made in the Bay Area: Harsh realities in new manufacturing

SETTING THE RECORD STRAIGHT (publ. 5/8/2013, page A2)An earlier version of a column by Mike Cassidy incorrectly reported the name of one Silicon Valley contract manufacturing company. The company name is Flextronics, not Solectron.

As the buzz builds around new manufacturing and its potential to re-energize a key sector of the Bay Area economy, Anthony Oliveri represents the face of old manufacturing.

The Hayward man was among the roughly 4,700 factory workers who lost their jobs when the sprawling New United Motor Manufacturing Inc. auto plant along Interstate 880 in Fremont closed in 2010. Despite its name, NUMMI was old manufacturing -- long assembly lines of workers churning out 400,000 vehicles a year. The work was hard and heavy, but the pay was good and the benefits better.

"I got a good job so I could have a family, a good career and life, but now, 20 years later, everything changed," says Oliveri, 40, who joined NUMMI shortly after high school. "It's over out there."

This, the final installment of Made in the Bay Area, looks at what the radical change in Bay Area manufacturing means for those who aspire to the American dream. It turns out that manufacturing jobs, which have been on a growth trend in the region, can still provide a worthwhile career. But there are far fewer jobs than there were in decades past. And the jobs are different, requiring higher skills and more education.

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The positions have provided opportunities for those who have armed themselves with those higher skills. People like Jeffrey Lease and Pearson Pong, who earned college degrees and went on to find work among Silicon Valley's burgeoning contract manufacturers, companies that design and produce products for other enterprises. And even old-school workers can retrofit themselves for the new work, as Oliveri's former NUMMI co-worker Greg Bostick did, landing a job that didn't pay as well as NUMMI, but did pay the bills and then some.

Those advanced manufacturing jobs aren't the jobs that the pundits, politicians and poets are talking about when they say factory jobs are never coming back. They're talking about jobs like those at NUMMI -- $30-an-hour union jobs that provided a path to homeownership, college for the kids and lifelong labor for those with few skills and a willingness to work hard.

When Oliveri walked out of the factory gate for the final time, he entered a changed world. Offshoring and advanced manufacturing with its increased automation meant that more than one-third of the Bay Area's manufacturing jobs had vanished while he was working at the plant. And when the jobs vanished or changed, so too did a clear path to the middle class for those with no more than a high school education.

Greg Bostick is photographed with a coordinate measuring machine at his job as a quality inspector at California Brazing in Newark, Calif. on January 16, 2013. Bostic was one of about 4,700 factory workers who lost their jobs when the NUMMI automobile factory closed down in Fremont in 2010. Bostic was able to enroll in a machine technology program at Laney College that gave him updated skills to find a new job. (Gary Reyes/ Staff)
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Gary Reyes
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"When my father was around, working in manufacturing, he had a sixth-grade education," says Jose Anaya, the initiative director of the Centers for Applied Competitive Technologies, based at El Camino College in Hawthorne. "He got a job and that's because they valued hard work and they valued brute strength. Now that isn't so much needed. They're looking for a higher set of skills."

The best manufacturing jobs today, those paying in the NUMMI range, might involve design and engineering skills or a familiarity with sophisticated machinery -- the types of jobs that require higher education or specialized training. You can find those jobs at companies like Foxconn, Flextronics, Sanmina and a host of contract manufacturers that have perfected the manufacturing process and who simultaneously make products for any number of Silicon Valley companies.

In fact, think of modern Bay Area manufacturers as relatively small operations turning out sophisticated electronic and medical devices and early iteration products. Such companies need production workers who have computer skills, problem-solving savvy, the ability to talk to designers and customers and to understand their concepts, and a willingness to retrain in order to make next big thing. That means higher education, at least in the form of some technical training.

"Twenty or 30 years ago you could have a high school degree and you could expect to get a job in a pretty stable industry and maybe have a one-earner family," says Doug Henton, CEO of Collaborative Economics in San Mateo. Now, "it's a more challenging time. You might need a couple of years beyond high school and even then you might need two incomes to support a family."

The shift in the sorts of jobs being created by modern manufacturing is starkly illustrated along the assembly lines and in the cubicles of one of Silicon Valley's fastest-growing production sectors: contract manufacturing. There you'll find Pong, 24, who started at Foxconn in San Jose after graduating at the height of the recession from UC Davis with a degree in molecular and cell biology.

"The plan was to just work here for awhile," he says. But he found he had an interest in manufacturing, in the way things are made. He learned on the job and after three-plus years is now a production planner making nearly $60,000 a year. As a planner, he juggles the schedules of different manufacturing projects in the plant, making sure just the right materials and components arrive at just the right time and that projects are completed by each customer's deadline. And when they aren't completed in time, it's Pong's job to explain what went wrong to the customer.

Lease's career path was more of a straight line. He earned an electrical engineering degree at Cal Poly San Luis Obispo before going to work for San Jose contract manufacturer Rocket EMS. Lease, 27, is a printed circuit board designer, a position with a median salary of $90,000 in Silicon Valley. It's the kind of manufacturing job that has economists like Henton excited. He and others note that professional support jobs -- designer, researcher, supply-chain manager, production engineer -- are adding the real value in the modern manufacturing renaissance.

The question is whether the nation's education system is adequately preparing students to take on new manufacturing jobs. A number of studies indicate that U.S. manufacturers are already having trouble finding qualified workers to fill all their positions. The Manufacturers Institute, a Washington, D.C.-based industry think tank, puts the number of open positions at 600,000. The Boston Consulting Group says the figure is closer to 100,000, but that the gap between workers' skills and available jobs is real and could grow if steps aren't taken. Then consider that the average age of highly skilled manufacturing workers -- machinists, welders, mechanics -- is 56, not far from retirement. Take it all together and you can make the argument that a young worker starting a manufacturing career has a bright future.

That future is unlikely to include someone like Oliveri, who was diagnosed with a learning disability in high school and who still struggles with reading. He says he landed the NUMMI job in 1991 through a county program aimed at helping those with disabilities. He's found no similar help this time, he says, and so he lowered his sights, applying for a clerk's job at Target and a dishwashing position at Denny's. He finally landed a $12.80-an-hour security guard job patrolling high-tech campuses in Silicon Valley.

Oliveri, his wife and 3-year-old daughter rely primarily on the money his wife makes working for a social service agency that provides adult day care. The loss of Oliveri's income is catching up with them.

"It's very stressful," he says. "How am I going to take care of the family, pay the mortgage?"

Dorothy Flores, 52, followed her boyfriend, Will Stamper, 47, to the NUMMI factory floor in 2001. Stamper, who installed drive shafts and rack and pinion systems in Toyota Tacoma trucks before moving to quality control, had already been at the plant for three years by then. Both lost their jobs with the closing, and though they still have each other, they've lost four homes between them to foreclosure. Stamper, who made six figures some years at NUMMI, watched the banks take his home and two rental properties he bought. And Flores lost her Fremont condominium.

After months of working a temp job and then driving a truck, she has found another manufacturing job, but at about half her NUMMI pay. Eventually, she says, she can work her way up to about two-thirds of her former pay. All that aside, she's grateful for the job.

"I love the work," she says. "I think I'm going to be OK there."

The rapid shift in manufacturing has left plenty behind, but nowhere is the downside to progress more evident in the Bay Area than among the NUMMI refugees. To talk to former NUMMI workers is to hear stories of divorce and foreclosure, of discouragement and a pining for the pride they once took in their work building foreign cars that have become among the most popular on U.S. roads.

The changing world behind the NUMMI workers' misery can be seen vividly in the hulking factory where they once worked. The buildings are being reborn as a new auto plant for Tesla, the electric car of the future. The company has hired some former NUMMI workers, "hundreds," a spokeswoman says. But while NUMMI employed 5,700 workers at its peak, Tesla needs only 1,000 to run its more highly automated lines that will produce only a fraction of the number of automobiles.

Comb through Tesla's manufacturing job openings for technicians and engineers and you'll see the need for years of experience with automation systems and an understanding of computers, including robotic programming skills and the ability to code programmable logic controllers. One high-level position lists 40 specific skills the ideal candidate would have.

The shift is one that former NUMMI quality inspector Bostick saw coming with the closing of his plant. He immediately set out to retool himself by enrolling in the Machine Technology program at Laney College, a community college in Oakland. He studied at night and looked for work during the day and finished the training program in two years. In early 2011, he landed a quality inspection job at a Hayward machine shop through one of his Laney instructors. He has since shifted to part-time work there and started another full-time job using computer programs and sophisticated tools to inspect parts at another shop.

"After NUMMI shut down, I knew I had to reinvent myself," says Bostick, 51, a divorced father of two who worked 18 years at the plant. "I was taking a full load because I wanted to hurry up and get through it."

The Fremont man was determined to hold his life together; and things are OK. With the two jobs, he says, he's now approaching the income he made at NUMMI, where the going rate was $29 an hour plus overtime.

"There are really no blue-collar jobs in California that you can make that kind of money and have no skills," Bostick says. "I don't know of any."

It's a lesson that the NUMMI refugees are learning over and over again every day.